FINANCIAL STATEMENT MODELING
RETAKE ACTUAL EXAM FROM WALL
STREET PREP||QUESTIONS AND
CORRECT DETAILED ANSWERS||
GRADED A+||2025 UPDATE
Which of the below accurately describes the revolver logic in our
model? - CORRECT-ANSWER-Nike needs cash - draw on revolver,
Nike does not need cash - pay down revolver if there is a balance,
Nike does not need cash - do nothing if there is no revolver balance
Why is the revolver interest rate lower than our long-term interest
rate? - CORRECT-ANSWER-It has higher seniority
What balance did we use for debt to calculate our annual interest
expense? - CORRECT-ANSWER-Average of beginning and ending
balance of debt
,What interest rate did we use for the interest income on our cash? -
CORRECT-ANSWER-0.50%
What is the main source of circularity in our model? - CORRECT-
ANSWER-The debt / interest schedule
What is the driver for the number of shares that we repurchase? -
CORRECT-ANSWER-Projected P/E multiple,
The $ amount of shares to be repurchased,
Projected share price
How did we calculate historical dilutive securities outstanding? -
CORRECT-ANSWER-Dilutive Shares Outstanding - Basic Shares
outstanding
, How did we calculate EPS in our model? - CORRECT-ANSWER-Net
income / diluted shares outstanding
What did we use as our projected P/E multiple? - CORRECT-ANSWER-
33x
Which formula below will give us share price? - CORRECT-ANSWER-
Price / Earnings * Earnings / Diluted Shares Outstanding
P/E * EPS
What strike price increase did we assume in our model for each
projection year? - CORRECT-ANSWER-$5
In module 8, what was the new cause of circularity in our model -
CORRECT-ANSWER-Shares Outstanding / Share Price / EPS
RETAKE ACTUAL EXAM FROM WALL
STREET PREP||QUESTIONS AND
CORRECT DETAILED ANSWERS||
GRADED A+||2025 UPDATE
Which of the below accurately describes the revolver logic in our
model? - CORRECT-ANSWER-Nike needs cash - draw on revolver,
Nike does not need cash - pay down revolver if there is a balance,
Nike does not need cash - do nothing if there is no revolver balance
Why is the revolver interest rate lower than our long-term interest
rate? - CORRECT-ANSWER-It has higher seniority
What balance did we use for debt to calculate our annual interest
expense? - CORRECT-ANSWER-Average of beginning and ending
balance of debt
,What interest rate did we use for the interest income on our cash? -
CORRECT-ANSWER-0.50%
What is the main source of circularity in our model? - CORRECT-
ANSWER-The debt / interest schedule
What is the driver for the number of shares that we repurchase? -
CORRECT-ANSWER-Projected P/E multiple,
The $ amount of shares to be repurchased,
Projected share price
How did we calculate historical dilutive securities outstanding? -
CORRECT-ANSWER-Dilutive Shares Outstanding - Basic Shares
outstanding
, How did we calculate EPS in our model? - CORRECT-ANSWER-Net
income / diluted shares outstanding
What did we use as our projected P/E multiple? - CORRECT-ANSWER-
33x
Which formula below will give us share price? - CORRECT-ANSWER-
Price / Earnings * Earnings / Diluted Shares Outstanding
P/E * EPS
What strike price increase did we assume in our model for each
projection year? - CORRECT-ANSWER-$5
In module 8, what was the new cause of circularity in our model -
CORRECT-ANSWER-Shares Outstanding / Share Price / EPS
